The European Commission is proposing to make cross-border payments in euro cheaper across the entire EU.

Under current rules, there is no difference for eurozone residents or businesses if they carry out euro transactions in their own country or with another eurozone member state. However, the proposal made on Wednesday would extend this benefit to people and businesses in non-euro countries.

"This will allow all consumers and businesses to fully reap the benefits of the Single Market when they send money, withdraw cash or pay abroad. All intra-EU cross-border payments in euro outside the eurozone will now be priced the same – with small or zero fees - as domestic payments in the local official currency," the Commission said.

"For example, a cross-border credit transfer in euro from Bulgaria will be priced the same as a domestic Bulgarian lev credit transfer. This is a major change, as fees for a simple credit transfer can be exorbitant in some non-euro area member states (up to €24 for a transfer of €10!).

Fees for a simple credit transfer can be exorbitant in some non-euro area member states (up to €24 for a transfer of €10!)

"Today's hefty fees are an obstacle to the Single Market as they create barriers to cross-border activities of households (buying goods or services in another currency zone) and businesses, in particular SMEs. This creates a major gap between eurozone residents who benefit from the single currency, and non-euro area residents who can only make cheap transactions within their own country."

The Commission is also proposing to bring more transparency and competition to currency conversion services when consumers are buying goods or services in a different currency than their own.

At the moment, consumers are usually not informed or aware of the cost of a transaction that involves a currency conversion. The proposal will therefore require that consumers are fully informed of the cost of a currency conversion before they make such payment (e.g. with their card abroad, be it a cash withdrawal at an ATM or a card payment at a point of sale, or online).

This means they will be able to compare the costs of different conversion options to make a fair choice.

The lack of necessary information to make the best choice often results in consumers being unfairly led towards the more expensive currency conversion option. The European Banking Authority will be tasked with drafting the necessary Regulatory Technical Standard to implement this enhanced transparency.

The legislative proposal will now be submitted to the European Parliament and Council for adoption.